Gold Retreats as Fund Managers Book 2011 Gains

Gold struggled Friday as fund managers booked profits on the yellow metal's gains this year, offsetting the lift it normally would have gotten from rising crude oil prices and stocks.

In late afternoon trading, the Dow Jones Industrial Average was up 0.5 percent, the Nasdaq Composite added 0.9 percent and the S&P 500 climbed 0.9 percent. Crude oil topped $100 a barrel before settled back a few pennies.

Since this summer, gold has been trading as less and less of a safe haven investment and more and more like risky assets such as stocks and the euro.

Despite the day's rising equities, gold prices struggled, at one point falling nearly 1 percent. By the end of the day it had pared losses to close down 0.2 percent.

Part of the reason gold moved in the opposite direction from stocks had to do with fund managers selling gold to lock in the substantial profits they have earned this year. Even with the big price drops of September and December the metal is still up more than 10 percent this year.

Gold also struggled because the dollar rose, making the metal more expensive for buyers who use non-U.S. currencies.

Some of the day's economic news also weighed on gold. The U.S. gross domestic product for the third quarter was revised down to 1.8 percent. Analysts had expected no revisions from the initial 2 percent.

Another piece of negative economic news that weighed on gold came from the Chicago Fed, which reported that its index of industrial production fell to minus 0.37 last month from minus 0.11 in October.

Shares of gold mining companies were mixed, but the SPDR Gold Trust and iShares Gold Trust were both down 0.74 in late afternoon trading.

Gold for February delivery fell $3 to $1,610.60, while spot gold declined $7.49 to $1,606.54.

ilver for March delivery slipped 20 cents to $29.05, while spot silver was off 47 cents to $29.10.